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CRESWELL-KEITH, INC. v. WILLINGHAM
March 26, 1958
CRESWELL-KEITH, INC., AN ARKANSAS CORPORATION, TRUSTEE FOR CRESWELL-KEITH MINING TRUST, PLAINTIFF,
B.F. WILLINGHAM, W.S. BRADHAM (ALSO KNOWN AS W.S. (PETE) BRADHAM), MILDRED WILLINGHAM, AND FLOY BRADHAM, DEFENDANTS.
The opinion of the court was delivered by: John E. Miller, District Judge.
In its complaint plaintiff alleges that the Court has
jurisdiction under 15 U.S.C.A. § 77v, and that all parties to the
action are citizens of the State of Arkansas. Plaintiff further
"3. On several occasions in August, September,
October and November, 1956, Defendants, B.F.
Willingham and W.S. (Pete) Bradham orally offered to
sell and assign to Plaintiff, through its president
R.N. Keith, their undivided interests in certain
leases of the gross production of oil, gas, and other
minerals from lands situated in Union, Nevada,
Ouachita and Dallas Counties in Arkansas. These
interests referred to in this Complaint as The
Interests, were offered for sale to Plaintiff
together with certain personal property, accounts
receivable and equipment of Oil Well Service Company
(a joint enterprise entirely owned by Defendants,
B.F. Willingham and W.S. (Pete) Bradham).
"4. On or about September 6, 1956, Defendants, B.F.
Willingham and W.S. (Pete) Bradham and Plaintiff
entered into an Escrow Agreement at The First
National Bank of Gurdon, Arkansas, with that Bank
named as Escrow Agent. Subject of the Agreement was:
"`One Eighth of seven eights working interest of
the 120 acres and four producing wells now in
production known as the Newton Estate "A" Lease,
wells A 1, 2, 3 and 4. (One, Two, Three and Four),
more particularly described as Section 35, Township
17 S, Range 15 West.'
Under terms of the Escrow Agreement the Agent was to
complete the assignment of the described interest
(referred to in this Complaint as the one-eighth in
the seven-eights of the Newton `A') to Plaintiff if
it obtained $7,000.00 from two separate bank accounts
owned by Plaintiff ($5,000.00 from the Valley
National Bank, Nogales, Arizona, in the account of
Santa Lucia Y Anexas, a predecessor of Plaintiff and
$2,000.00 from The Commercial National Bank, Little
Rock, Arkansas) for Defendants.
"5. Defendants signed and mailed from Gurdon,
Arkansas, and/or El Dorado, Arkansas, to the
Stanolind Oil Purchasing Company of Tulsa, Oklahoma,
a Division Order stipulation covering the transfer of
the one-eighth in the seven-eights interest in the
Newton `A' Lease.
"6. Defendants then caused the Stanolind Oil
Purchasing Company to mail its check to Plaintiff.
The check sent through the U.S. Mail was received by
Plaintiff in Hot Springs, Arkansas, on or about
November 19, 1956. This check in the sum of $913.32
was represented by Defendants B.F. Willingham and
W.S. (Pete) Bradham to Plaintiff as being one months
`run' on the Newton `A' lease. In fact, it
represented the accumulation of several months
payments, which Defendants well knew.
"7. On the basis of the oil run check, referred to
in Paragraph 6, the oral misrepresentations
concerning it, and the other oral misrepresentations
made to Plaintiff by Defendants, B.F. Willingham and
W.S. (Pete) Bradham Plaintiff and Defendants entered
into an Assignment Agreement dated November 29, 1956,
by which Plaintiff purchased The Interests, and the
personal property, accounts receivable and equipment
of Oil Well Service Company. One of the properties
involved in this transaction was the remaining
portion of the Newton `A' lease and it was the most
substantial single item of consideration in the
Assignment of November 29, 1956. Defendant's
misrepresentation that the oil run check it caused to
be mailed to Plaintiff was one months payment, led
Plaintiff to believe the
worth of the Newton `A' lease to be greater by far
than it actually was and led Plaintiff to believe the
other misrepresentations of Defendants.
"8. The Assignment of November 29, 1956 was a
contingent Assignment, Complete upon Plaintiff paying
certain debts and obligations of Defendants, B.F.
Willingham and W.S. (Pete) Bradham and the Oil Well
"9. The Assignment, attached as Exhibit D, sets
forth fully and describes the obligations and debts
to be paid and The Interests, personal property,
accounts receivable and Equipment of Oil Well Supply
"10. Plaintiff has paid $90,000.00 of these debts
and obligations and Plaintiff has assumed and has
accepted responsibility of payment of Obligations of
Defendants in the further amount of $2,500.00 (for
property damage in certain litigation over the salt
"11. On or about the 4th day of September, 1956,
Defendants placed or caused to be placed, in the
United States Mail at Gurdon, Arkansas, an envelope
addressed to Valley National Bank at ...
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